China’s trade ministry said prolonged US dollar weakness could escalate actions taken in a “currency war” and add to risks for exporters.
“The continued and drastic US dollar depreciation recently has led countries including Japan, South Korea and Thailand to intervene in the currency market, intensifying a ‘currency war,’” the Chinese Ministry of Commerce said in a trade outlook report posted on its Web site yesterday.
“In the medium-term, the [US] dollar may continue to weaken, exacerbating actions related to major currencies and adding risks to companies’ operations,” the ministry said.
China is under pressure from major trading partners, including the US and Europe, to let its -currency appreciate faster. Emerging economies have complained that near-zero US interest rates and US Federal Reserve asset purchases have pushed the US dollar down and sent funds flooding into their markets, stoking asset bubbles and inflation.
The Fed may unveil a second round of asset purchases, so-called quantitative easing, after policy makers meet today and tomorrow. Currency disputes are set to dominate the summit of G20 leaders in Seoul from Nov. 11.
“The uneven pace of economic recovery around the world this year has prompted major economies to increasingly adopt self--serving macro-policies with increased trade protectionism,” the ministry said in the report.
China’s exports face limited room for growth next year because of weaker global demand, rising trade disputes and higher domestic labor and raw material costs, it added.
China ran up a record US$28 billion trade surplus with the US in August, according to figures released by the US Commerce Department on Oct. 14. That bolstered complaints from the US business groups and lawmakers that a weak Chinese currency gives the Asian nation’s exports an unfair advantage.
Even as China runs a surplus, the nation has curbed the yuan’s rise to about 2 percent against the US dollar since a June pledge to introduce more flexibility, saying anything other than a gradual appreciation could cause social and economic disruption.
The US Dollar Index, which gauges the US currency’s value against a basket of six -counterparts including the euro, yen and pound, has fallen more than 4 percent since Sept. 21, when the Fed said it’s prepared to act to support the economic recovery.
The Fed’s “uncontrolled” issuance of US dollars is adding to inflation risks in China and creating difficulties for the nation’s businesses, Chinese Minister of Commerce Chen Deming (陳德銘) said last week.
US policies “and continued increases in commodity prices are bringing China the shock of imported inflation,” Xinhua news agency cited Chen as saying at a trade fair in Guangzhou.
Finance leaders from the G20 pledged to refrain from “competitive devaluation” to ease fears of a trade war and help curb volatility in capital flows after meeting in South Korea last month.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
RSS